The Burry Process

I’d read some of Michael’s Lewis’s stuff on Michael Burry and watched some documentaries on the housing crisis but finally watched The Big Short last night. I came away thinking that you can generalize and universalize Michael Burry’s basic strategy / process.

The Burry Process:

Constant Opportunities: Assume that greed can beget misrepresentation and that misrepresentation abounds regardless of decade or market cycle because avarice = a human constant.

Incentive: Create structures that reward you for uncovering the truth.

Fervor: Be okay with, even excited about, the arduous work that uncovering the truth takes.

Faith: Have the endurance to overcome naysayers who won’t do the work to see past the misrepresentation and will question your research.

Humility: Do it, primarily, for the love of, and satisfaction that comes from, discovering the truth.

This process is applicable beyond housing bubbles and probably useful in all macro trend analysis.